After touching a new all-time low, SKS Microfinance has been hitting the upper circuit over the last five days. The stock moved up from a low of Rs 190.05 on 2 September to the current level of Rs 265.90.
The stock has been moving up on two sets of news. The first being that the board of SKS Microfinance is contemplating to oust Dr Vikram Akula from the company he founded. The second is that the company is planning to approach the RBI for a banking licence.
As for the move to remove Dr Akula, it can at best be seen as an image makeover for the company, which has taken a big hit since Gurumani was sacked as the CEO.
Coming to the banking licence, it is unlikely that the company will be meeting the corporate governance criteria laid out by the RBI. Experts say the financials of the company are a cause for concern.
SKS Microfinance has been incurring losses since the Andhra Pradesh government clamped down on its recovery agents for ‘forcefully’ collecting money from its customers. The company suffered a loss of Rs 218.74 crore for the March quarter and Rs 69.77 crore for the June quarter.
The company’s stock has fallen to the current level of Rs 262.60, from Rs 1,491.50 in September 2010.